Bmi profits soar despite stall in passenger numbers

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The Independent Online

Britain's second-biggest full-service scheduled airline group, bmi, unveiled a fivefold increase yesterday in profits for past year, despite failing to increase passenger numbers.

The group, which operates short-haul and long-haul services from Heathrow, as well as regional services and the no-frills airline bmibaby, saw pre-tax profits rise to £10m from £2.6m in 2004. The chairman, Sir Michael Bishop, said further "material improvement" had been achieved in the first quarter of this year.

The profit increase came despite bmi's failure to increase passenger numbers from the 10.5 million carried in 2004, a slight fall in the proportion of seats filled on each flight and a £37.5m increase in fuel costs.

Nigel Turner, the chief executive of bmi, declined to give a breakdown of the profitability of the individual airlines but said all parts of the group had contributed to the improvement. He said the decline in passenger numbers on bmi's mainline domestic and European services from Heathrow had been offset by an improvement in yields and an 8 per cent reduction in costs other than fuel.

Sir Michael, who controls 50.1 per cent of the group, said there were no plans for any changes in ownership. It is an open secret that Lufthansa and SAS, who own the remainder of the shares, are keen to offload their stakes. They intend to pull out of a joint venture with bmi to pool revenues on European services at the end of next year, having suffered losses of £200m on the arrangement over the past five years.

Separately, bmi announced it had been granted rights to start flying a daily service from Heathrow to Moscow in partnership with the Russian carrier Transaero.

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